Global South African News Wrap 5 October 2012 Motlanthe: Playing by the book Canning SA-EU treaties will

l raise cost of investment Tributes paid to revolutionary journalist Tutu wins special Mo Ibrahim award for being voice of truth Constitutional Court rules Simelane appointment was invalid Low ratings reflect weak leadership Dead hand hovers The Thick End of the Wedge: The Publishers Notebook Rating cut is a wake-up call Chamber of Mines willing to engage with Cosatu to end strikes ANC nominations to vie with Farlam inquiry State mum on bailout for SAA Malema's not my boy: Mbalula Violence flares up as wildcat strikes spread to other industries R5bn state guarantee keeps SAA in the air Ballooning ANC membership figures raise eyebrows Analysts wait for signs of SAs direction ANC allocates 4,500 Mangaung votes Schools alliance calls for probe of five education departments SA is on the precipice Downgrades concern Marcus Strike havoc spreads Employers at fault Cosatu Leader of the DA faces no palace rebellion Motlanthe, Sexwale silent on Mangaung Gauteng eyes investments for job creation Analysts: JZ will be winner in Mangaung Deeply scarred SA crying out in agony Pandor climbing ladder towards top echelon in ANC New BEE codes will hit equity dodgers It was ability, not Zuma vote, says Pandor

5 October 2012 Mail & Guardian Charles Molele, Rapule Tabane, Matuma Letsoalo Motlanthe: Playing by the book A fiery new biography has revealed how Deputy President Kgalema Motlanthe really feels about his ANC rival, President Jacob Zuma. Kgalema Motlanthe has expressed unhappiness about how the current administration has handled the issues of service delivery to the poor, the abuse of state organs and the state of affairs in the ANC, according to a new book by author and former trade unionist Ebrahim Harvey. Motlanthe also takes a swipe at ANC leaders for kicking former youth league president Julius Malema out of the organisation. He makes it clear in the book that he does not try to isolate himself from the problems he is part of the party leadership, after all but it is evident that he is not happy about the overall performance of the ANC and it's government. Motlanthe does not specifically blame President Jacob Zuma, although the comments could be inferred as indirect criticism of his rival for the party presidency at the Mangaung conference in December. Harvey's Kgalema Motlanthe: A Political Biography, will be launched on October 11 in Johannesburg. Poor majority "Kgalema's hopes for the new Zuma term were dashed in several major respects, but he does not try to distance himself from the problems. The situation for the poor majority, relations between the ANC and its allies and the state of affairs within the ANC itself are all on the whole very much as they were under [former president Thabo] Mbeki," writes Harvey. "For the poor, in fact, it is arguable that conditions have worsened, mainly through the growing economic crisis starting in late 2008 and the results of some of our own economic and social policies." The political biography is launched on the eve of Mangaung, but Motlanthe's office said the publishers and the author made the decision and it had nothing to do with him. Another extract reads: "Other concerns for Kgalema are the continued abuse of state organs for political ends; a lack of unity and trust among top party officials; a destructive preoccupation with succession issues and less with services to the people; a steady departure from the fraternal, unitary and renewal themes at Polokwane; and a corrosive factionalism and careerism that has become rampant. His hope was that with time these things would improve. Instead they have got worse since Mbeki's time in office."

In the past few weeks, some ANC Youth League and ANC leaders particularly from Limpopo have accused Zuma of abusing state resources to settle political scores after Malema was charged with money laundering. ANC spokesperson Jackson Mthembu dismissed the claim. The launch of the book comes days after the ANC national executive committee officially opened nominations for the top leadership at the party's 53rd national congress in Mangaung. The biography will be released a week after the public protector cleared Motlanthe and his partner, Gugu Mtshali, for improper involvement in a deal to supply Iran with helicopters. Leadership qualities On Wednesday the youth league nominated Motlanthe as its preferred candidate for the position of ANC president, saying he has displayed the leadership qualities necessary to rescue the ANC from total decay and take the country into the 21st century as it grapples with issues such as growing the economy to create jobs and reduce deepening inequalities. Other league preferences include ANC treasurer general Mathews Phosa, Human Settlements Minister Tokyo Sexwale, deputy secretary general Thandi Modise, Arts and Culture Minister Paul Mashatile and South Africa's ambassador to Italy, Thenjiwe Mtintso. Despite his failure to declare his intentions publicly, it looks almost certain that Motlanthe will stand for the ANC presidency if nominated. Those close to him say Motlanthe feels he has nothing to lose, should he avail himself for the position. "He is not sentimental. He does not fear losing. He is not afraid or worried about safety of positions that he might lose the position of deputy president or a position in the top six. His approach is that he serves at the invitation of the membership of the ANC and he will not go to them to canvass for support. It is up to them to decide where they want him to serve," said a confidant. The leadership race for Mangaung has gained impetus after the publication of the numbers of Mangaung voting delegates, who appear to favour Zuma. Motlanthe's insistence on "respecting" the wishes of delegates appears to indicate that he will not buy into any leadership solution that entails delegates not being allowed to express their wishes through the ballot. It was reported recently that Zuma's lobbyists had offered Motlanthe South Africa's presidency in 2014 if he would not challenge Zuma in Mangaung. How democracy works A close associate of Motlanthe said he was fond of using the example of former ANC and South African Communist Party leader Harry Gwala, who

had opted to challenge veteran Walter Sisulu at the ANC conference in Durban in 1990, even though Sisulu appeared to be the popular choice. "Gwala said he had to stand to demonstrate how democracy works. The ANC constitution says any member in good standing can stand for any position of leadership. He wanted to teach people that leadership by arrangement is wrong. We must allow delegates to decide," said the deputy president's associate. Motlanthe's associate also referred to the example of African Union commissioner Nkosazana Dlamini-Zuma, who also declined to stand as national chairperson when Zuma lobbyists approached her in 2007 before the Polokwane conference. "They assured her that she was guaranteed the position if she stood as national chairperson, but they would not support her candidacy as deputy president. But she told them the women's league had nominated her as deputy president and she would respect its wishes. She did not see herself as being in some kind of rivalry with Motlanthe, who was the other candidate for the position. She lost against Kgalema but the sky did not fall down; she continued to stay in the ANC and work well with Kgalema in Cabinet when he became acting president after Thabo Mbeki was removed." In Harvey's book, Motlanthe also dismisses speculation that he would not avail himself if Zuma was still available for the top post at Mangaung. Manoeuvring "No, it is not true at all, but nobody has approached me. My position is that nobody must try to canvass for themselves in the run-up to elections. It is up to the will of the branches. "But if I am nominated for such a position when the electoral commission approaches me and says I have been nominated for such a position, I will either accept or decline. However, I will not be party to any manoeuvring outside the prescribed constitutional structures and processes," Motlanthe is quoted as saying. On the question of the expulsion of the Malema, Motlanthe believes it was not necessary to expel the firebrand youth leader. Harvey writes that Motlanthe thought, after the youth league held its conference in 2011 and submitted its report and resolutions to the mother body, the ANC should have pointed out whether there were inconsistencies between that and the ANC's constitution and resolutions. Motlanthe also criticises the ANC for failing to monitor Malema who did not go for anger-management therapy in 2011 despite the national disciplinary committee ordering him to do so.

"But though these were his concerns, he, as always, respected decisions taken by all ANC structures and did not seek to oppose them," writes Harvey.

5 October 2012 Business Day Page 1 Mark Allix, Canning SA-EU treaties will raise cost of investment RELATIONS between the European Union (EU) and SA have soured since the government indicated last month that it was cancelling bilateral investment treaties with the blocs member states. The government argues that the treaties restrict its ability to transform SAs economy. But its largest trade and investment partner says cancelling them will raise the cost of investment in SA. The EU fears it is a victim of political bias, and feels shunned by SAs growing relationship with China and other Brics nations. Roeland van de Geer, head of the EU delegation to SA, said yesterday that the bloc had told SA to "diversify" its trade and resist the notion it did not need Europe. "We have also said to SA, improve your investment climate for foreign direct investment," Mr van de Geer said. The killing of miners by police at Marikana in August had caused "huge" ructions in Europe, and constant talk of nationalisation in SA had fuelled investor uncertainty, Mr van de Geer said. The EU accounted for more than 80% of foreign direct investment in SA, valued at 34% of gross domestic product in 2010, about R916bn. Axel Pougin de La Maisonneuve, first counsellor of the EU delegation, said foreign direct investment into SA was only one-third of that going to Chile, and lagged far behind other emerging markets. The EU accounted for about 30% of SAs trade, with SA exporting R152bn worth of goods to the bloc last year, and importing R223bn worth of EU products. China accounted for 4% of foreign direct investment in SA in 2010, with SA exporting R85bn in goods to China last year, while importing R103bn in Chinese goods. Trade among SA, Russia and Brazil last year was less than R20bn.

The EU delegation said European investors were concerned there was "no commercial advantage" to be gained from black economic empowerment (BEE). D espite trying to comply with BEE, EU companies were not getting fair treatment from the governments preferential procurement policies. But the delegation acknowledged the legacies of apartheid, and was aware the relationship with SA lacked "nuance".

5 October 2012 Business Day Page 3 Setumo Stone Tributes paid to revolutionary journalist FRIENDS and former colleagues of Zwelakhe Sisulu, who died yesterday at the age of 61, say his independence of thought was the one thing he shared with his late parents, African National Congress (ANC) stalwarts, Walter and Albertina Sisulu. Tributes have been pouring in for Mr Sisulu, who passed away yesterday morning at his home in Johannesburg after a long illness. His siblings include National Assembly speaker Max Sisulu and Public Service and Administration Minister Lindiwe Sisulu. The Sisulus are considered to be the closest SA has to political royalty, alongside the Tambos and the Mandelas. Mr Sisulu was a respected businessman and journalist who, as president of the Black Media Workers Association of SA, was arrested under the Internal Security Act during apartheid. Gabu Tugwana, former deputy editor of the defunct New Nation newspaper which Mr Sisulu edited in 1986 before being detained for two years said yesterday he would remember Mr Sisulu as an independent thinker. "It is a common thread that runs within the family. "They are outspoken in whichever capacity they serve." Mr Tugwana took over the running of the New Nation after Mr Sisulu was arrested. Following his release, Mr Sisulu was banned from any involvement in the New Nation, which under Mr Tugwana continued publishing until it closed shop in 1996. Mr Sisulu became the first black group CEO of the SABC, a post he held for three years, from 1994 to 1997.

Critics have argued that the foundation laid by Mr Sisulu at the SABC has gone to waste, following a spate of recent controversies surrounding the public broadcaster. Mr Sisulu was also an active shareholder and director in a number of companies, including Dirleton Minerals & Energy and Afriminerals. His nephew Shaka Sisulu said on social media that his uncle spent the past few years nurturing business interests across Africa. In a statement, President Jacob Zuma described Mr Sisulu as a "freedom fighter, journalist and business person", saying news of his death was shocking and sad. "We are truly saddened by the loss, and wish to extend our deepest condolences to the entire Sisulu family." Mr Sisulu received a number of awards including the International Human Rights Law Group Award, the Union of Swedish Journalists Award and the Rothko Chapel Award for Human Rights. The South African National Editors Forum (Sanef) said Mr Sisulu was an inspiration to many journalists. "He was a mountain of a journalist and never strayed from telling the truth and challenging authority," said Sanef chairman Mondli Makhanya. The Congress of South African Trade Unions said Mr Sisulu used his media skills to advance the liberation struggle. The National Union of Metalworkers of SA (Numsa) said he represented "a special breed of revolutionary journalists ever to emerge within the ranks of the mass democratic formations". Numsa spokesman Castro Ngobese said the union would forever be indebted to the Sisulu family "for donating their son to the struggle for national liberation and freedom". Mr Tugwana said SA should join hands with the Sisulu family in this difficult time. "We owe it to them to show our appreciation ." 5 October 2012 Business Day Page 3 Setumo Stone and Bekezela Phakathi ANC in Limpopo says it backs Motlanthe THE African National Congress (ANC) in Limpopo says all its provincial leaders are "walking together" in the campaign to have Deputy President Kgalema Motlanthe replace President Jacob Zuma.

However, this came amid talk that deputy provincial chairman Dickson Masemola was lobbying support for Mr Zuma. Mr Masemola was not available for comment yesterday. Nominations of candidates for the ANCs national elective conference in Mangaung in December opened this week. Mr Zuma appeared to enjoy an early lead, with the combined support of KwaZulu-Natal, the Free State and Mpumalanga. But this may not necessarily translate into votes by conference delegates. In the run-up to the conference, provincial leaders particularly in highly divided provinces such as the North West and the Western Cape would be seeking to influence conference delegates in the branches to support their nominees. The Limpopo ANC was the first province to express its support for Mr Motlanthe a declaration blamed on what appeared to be a hostile relationship between the provincial leadership and Mr Zumas supporters in the party and the national government. Limpopo ANC spokesman Makonde Mathivha said yesterday that two meetings were held recently to assess the party leadership and to discuss candidates, "and no one had objected to the views of the province, including the deputy chairman". Yesterday, the deputy chairman of the ANC in North West, China Dodovu, said he did not agree with this weeks decision by his provincial executive committee to support a second term for Mr Zuma, indicating that the North Wests choice of presidential candidate is still in contention. The North West provincial executive committee said after a meeting on Monday that it wanted current party leaders retained in their positions, including Mr Zuma and Mr Motlanthe. However, Mr Dodovu said the ANC was facing a crisis of leadership and Mr Motlanthe could rescue the organisation. While the ANC in the Western Cape has yet to decide who it will nominate between Mr Zuma and Mr Motlanthe, strong indications were that most structures in the province were backing the deputy president. The partys provincial executive committee met on Wednesday to discuss policy as well as its preferred candidates to lead the ANC. Provincial chairman Marius Fransman who earlier this week was quoted as saying Mr Zuma should serve a second term said the final decision would be made by the branches. Mr Fransman said the province would only announce the names of its preferred candidates at the end of next month after its provincial general council.

However, Western Cape ANC youth league chairman in the Dullah Omar region, Khaya Yozi, said delegates would back Mr Motlanthe. "What is concrete right now is that Mr Motlanthe will be backed by the Western Cape to be the next president of the ANC," Mr Yozi said. Limpopo and North West rank fourth and seventh among the nine provinces in terms of ANC membership size. In Mangaung, Limpopo will have 574 voting delegates, North West will have 234, and the Western Cape 178 delegates. Mr Mathivha referred all queries about the list of candidates preferred by Limpopo to provincial secretary Soviet Lekganyane, who was not available for comment. 5 October 2012 Business Day Page 4 Staff Tutu wins special Mo Ibrahim award for being voice of truth THE Mo Ibrahim Foundation awarded a "one-off extraordinary award" to Archbishop Desmond Tutu in Johannesburg on Thursday, in recognition of his lifelong, consistent commitment to speaking the truth and being a voice for justice and democracy. The foundation, which was established by Sudanese businessman Mo Ibrahim, rewards good governance on the African continent. The award, which will be presented to Mr Tutu in Dakar later this year during the annual Ibrahim Discussion Forum, includes a grant of $1m that Mr Tutu could use for his various foundations, or at his own discretion, Mr Ibrahim said in Johannesburg on Thursday. Former president Nelson Mandela is the only other recipient of such an award, and Mr Ibrahim said the fact that both of these awards had been given to South Africans was a coincidence, but also "a compliment to South Africa". Mr Tutu was "an outstanding African civil society champion" who gave a voice to the voiceless and spoke hard truths, Mr Ibrahim said. While people did not always agree with the archbishops comments, he was "a very powerful voice". "Whether one agrees with Archbishop Tutu or not, his contribution to dialogue, to accountability, and to the debate on Africas future has been unparalleled", he said.

The award would not replace the Ibrahim Prize for Achievement in African Leadership, which has been awarded annually since 2007 to a former head of state who has demonstrated excellence in office. This award was not given to anyone in 2009 and 2010 because of a lack of suitable candidates. Foundation board member and former Cabinet minister Jay Naidoo said the special award would "hopefully inspire more people to stand up and speak truth to power". The award was given at a time when there was "growing political arrogance" on the continent, Mr Naidoo said.

5 October 2012 Business Day Page 4 Staff Constitutional Court rules Simelane appointment was invalid THE Constitutional Court on Friday unanimously held that the appointment of prosecution head Menzi Simelane was constitutionally invalid. The judgment means President Jacob Zuma will now have to decide who to appoint as the new national director of public prosecutions. Mr Simelanes deputy, Nomgcobo Jiba, has been acting in his stead since Mr Simelane was put on special leave in November last year. The courts order also specifically addressed what its judgment meant for Mr Simelanes decisions during his time as prosecutions head, saying they were not invalid merely because of the invalidity of his appointment. In handing down judgment, Justice Zak Yacoob said that when President Jacob Zuma appointed Mr Simelane, he should have taken into account the harsh criticism against Mr Simelane by former speaker of Parliament, Frene Ginwala, in her report on the fitness for office of Mr Simelanes predecessor, Vusi Pikoli. Instead, Justice Minister Jeff Radebe advised the president to ignore the report, said Justice Yacoob. In her report, Ms Ginwala questioned Mr Simelanes honesty as a witness and said his conduct at her inquiry left much to be desired. Justice Yacoob said Mr Simelanes evidence at Ms Ginwalas inquiry was contradictory and, on its face, indicative of Mr Simelanes dishonesty.

It raised serious questions about Mr Simelanes conscientiousness, integrity and credibility. Dishonesty was inconsistent with the conscientiousness and integrity required for the proper execution of the responsibilities of the national prosecutions director, he said. Indeed, I would say that dishonesty is the enemy of integrity and conscientiousness. Justice Yacoob said the requirement that the national director must be a fit and proper person, with due regard to his conscientiousness and integrity, was something to be determined objectively. In looking at the legal test for rationality, Justice Yacoob said the test obliged courts evaluate the relationship between the means employed to reach a decision, on the one hand, and the purpose for which the power to make the decision was conferred on the other. Each and every step in the process of reaching the decision must be rationally related to the outcome, he said. A failure to take into account relevant material that colours the entire process with irrationality would render the decision irrational, said Justice Yacoob. Addressing the relationship between a courts power to review executive decisions and the separation of powers, Justice Yacoob said the rationality test was the least invasive form of legal scrutiny. Its applicability in respect of executive decisions flows from the acceptance and recognition of the separation of powers, not the converse, he said. The judgment is a resounding victory for the Democratic Alliance (DA), which has been fighting the court case since 2009. DA leader Helen Zille said it was an important victory for all those South Africans from all parties who value and treasure the constitution, and hope to see it respected by our leaders. The ruling demonstrates that power abuse can be prevented by the courts, even when it is perpetrated at the highest levels of our government, she said. 5 October 2012 Financial Mail Page 10 Editorial Low ratings reflect weak leadership

Since the financial crisis four years ago, many international commentators have adopted the view that the ratings agencies, including the big names such as Moody's and Standard & Poor's, were part of the problem and do not deserve much attention. Some of the opprobrium may be deserved, but SA cannot afford to take that position. The decision by Moody's to downgrade its rating of the country's sovereign bond from A3 to Baa1 with a negative outlook is worrying at several levels. There was no surprise in the downgrade but it draws attention to growing concerns about SA's political and economic leadership, and its ability to control the country's destiny. The Moody's rating is now at the same level as the other two large ratings firms, Fitch and Standard & Poor's, have given SA. These ratings are still considered to be investment grade. For now, the impact is more at the level of sentiment than a direct economic effect. If SA loses its investment grade rating, the consequences will be larger. Many international investors such as certain pension funds are prohibited by their mandates from investing in foreign countries that do not hold investment grade ratings. That may be some way off from happening. But the reasons Moody's gave for its downgrade, the language it used and government's muted response are more worrying. If the decision were based on external events such as weak demand in export markets and low commodity prices, or on a sudden deterioration in domestic economic data such as the current account, that would be one thing. Those are partly cyclical events and can be mitigated with the right policies. But the agency's downgrade was linked as much to qualitative issues, or judgments about local trends, as the recent numbers. It referred to a decline in government's institutional strength and diminished capacity to manage the growth and competitive risks; shrinking headroom for counter-cyclical policy actions; uncertain revenue prospects and the already low level of interest rates; and increased concerns about SA's future political stability. The "fractious domestic environment", it said, was not conducive to the reforms being implemented at present. The outlook remained negative because of uncertainty surrounding critical policy decisions that will be made at the ANC conference in December. A global agency, which assesses scores of countries, has taken a clear-eyed look at SA and found diminished room for confidence. Other commentators have placed increased weight recently on political and social aspects in their analysis of SA. In its economic commentary this week, BofA Merrill Lynch also referred to uncertainties about what economic policies the ANC may adopt in December, particularly for mining. Another firm, Nomura International, says it sees the political risk not as a cataclysmic blow-up, or a Zimbabwe scenario, but that the status quo

continues and the country moves further down the road of state intervention and tight labour laws that erode competitiveness. It says the answers to SA's problems are in government's national development plan but agrees with the Moody's assessment that much of the plan is never likely to see the light of day in this environment. It sees SA's medium-term outlook as one of underachieving its "potential potential"; that growth could be so much higher with the right policies in place. Considering the much faster growth that's needed to reduce SA's unemployment rate, that is a bleak assessment. The firm rand, a rising stock market, foreign buying of local bonds, a credible central bank, a reasonable (though slipping) fiscal position and continued, albeit feeble, growth help create an illusion of relative strength and stability. The risks of social instability are rising, as shown by the growing incidence of wage strikes and violent protests. That cannot be avoided by working on SA's "image", as finance minister Pravin Gordhan said was needed after the Moody's downgrade. It requires political resolution and credibility.

5 October 2012 Financial Mail Page 6 Barney Mthombothi Dead hand hovers At the ANC policy conference earlier this year the partys ruling faction floated what it called a second transition an attempt perhaps to show some sort of intellectual cachet. Instead it merely exposed the paucity of ideas in the upper echelons of the party. It was a nonstarter. But it nevertheless unleashed a heated debate on what was a banal subject. Serious issues were overlooked. Not even an economy shedding thousands of jobs could provoke such excitement. What is a second transition, Kgalema Motlanthe wondered aloud. Its authors seemed tongue-tied, unable to explain the nature of their beast. President Jacob Zuma, realising it wasn't such a popular idea after all, disowned it. Failure, they say, is an orphan. But the second transition was supposed to be the pony Zuma was going to gallantly ride into his second term. He needed some message to sell or justify his candidacy. Leaders tend to struggle to explain why they need a second term in office, or what they'll do once they've achieved it. Barack Obama, eloquent orator though he is, seems at times at a loss for words on why he should be re-elected.

SA is a young, somewhat itinerant, democracy. But there are a few lessons we can glean from its short history. One of them is that, on the evidence so far, the country seems to be struggling with the idea of a second presidential term. It is perhaps a mischaracterisation to call it a presidential term. The country does not elect its president. He is leader of the majority party in parliament. Nelson Mandela did himself a favour by retiring after one term. Thabo Mbeki, self-assured and who seemed firmly in charge of his party for most of his time in office, was summarily removed from power before he could complete his second term. Zuma is in a precarious position. He may squeak through. Hark back to the pre-Polokwane elective conference in 2007. His removal from cabinet had led to a groundswell of support and had given him ample time to campaign against his nemesis. The deal was done even before delegates converged on Polokwane. Only Mbeki and his loyalists seemed unaware of the approaching tide that was about to sweep them aside. For Zuma supporters, it was not ideology, issues or strategy that united them, but their outright hostility towards Mbeki. He was their unifying figure. This time, however, Zuma seems to have succeeded in riling not only those in the party who despised him in the first place, but even those who propelled him to power. His base is divided. The youth league is actively campaigning against him, the labour movement is split down the middle. Only Blade Nzimande and his tiny band of communists are marching with him. Few in the ANC seem to speak up in his favour, except Gwede Mantashe whose fate is tied to that of Zuma anyway. Zuma seems destined to muddle through to a second term only because the opposition is too divided. But that doesn't bode well for his survival. He's unlikely to finish his term. He lacks Mbeki's adroitness or dexterity. And we know what happened to Mbeki. The problem doesn't seem to be with the country or its voters, but with the ruling party. We are hostage to its shenanigans. What the ANC needs is not some vague or ill-defined second transition, but a second revolution; a complete and radical change in its political culture. The dead hand of its past is having a chilling effect on the country. It is archaic and backward in deed and thinking. It speaks in a language we can hardly understand. It sees democracy not as a principle, but as a tactic; its acceptance of it always reluctant and grudging. It was only this week, for instance, that it "allowed" nominations of candidates for its December conference - a sort of democracy by permission. It should let go of the past and its practices and join the march to the future.

1 October 2012

Business Day Page 10 Peter Bruce The Thick End of the Wedge: The Publishers Notebook READING the papers, which is what I now do to find out whats going on, it is more obvious than ever that the ruling African National Congress (ANC) is in very deep doo-doo. It is beyond rescue and when it is finally toppled in an election it will take a very long time to recover. When it does recover, it will look a lot like those earnest Nordic socialist parties of the 70s. Worthy, but boring in other words, a viable ruling party again. I used to think our politics would go like this: the ANC wins the general election in 2014 with around 60% of the vote, a frighteningly low number for it but a daunting number, nonetheless, for a fragmented opposition. By the general election of 2019, the number will have fallen to around 54% of the vote. By then there will already exist widespread panic in the party, with associated colourful material for the media and the chattering classes. The communists will blame capitalism still, the ANC will blame apartheid, and Cosatu will be looking for a new alliance to join or to form a party of its own. In the meantime, not through much invention of its own, the Democratic Alliance (DA) will have done well at the next local government elections (in 2015), winning not only Cape Town, but Port Elizabeth and Tshwane also. They know how to run cities. And by the 2024 general elections, I had the ANC below 50% of the national vote, needing the support (which it would buy it is already run on the principle that everything and everyone has a price) of small parties in the National Assembly to form either a minority government or a coalition. But with each passing day the future for the ANC looks worse. First, President Jacob Zuma appears set to win re-election as party leader in December. That makes him the lead candidate to run the country until 2019. From today, thats almost another seven years of JZ at the helm and it is inconceivable he would be able to improve on his first-term performance. If anything, it will get worse. Final terms make lame ducks of even the greatest leaders. There is no covering up for Zuma. He runs, basically, a kleptocracy in which the taxpayer funds lifestyles (his included) rather than policies. He will be found out by the constituency he most treasures; the poor and helpless. They are poor, not stupid. Fairly soon the declining national finances will make it impossible to continue buying their affections. He is and always has been a survivalist, with little interest in statecraft. Given more time in charge he will destroy even more of the national wealth. It is simply idiotic to expect a different result the second time around. But if thats what the ANC wants.

What is important now are the first efforts to unite the opposition into something that might in a few years be a viable alternative (for the 2019 election is my estimate). DA leader Helen Zille has started it and, naturally, run into a wall of sarcastic rebuttal from the black middle class (especially on Twitter), which is acutely embarrassed by Jacob Zuma but doesnt know where to go politically. I will help them: in seven years Helen Zille will be gone but she will have laid the groundwork for a big-enough opposition coalition that you will vote for and so remove the ANC, if not from office at least from its perch as the majority party. You will actively participate in the defeat of the party you acknowledge liberated you. How does that feel? If you love the ANC (and there are still many reasons to really feel deeply sentimental about the party) you will rejoice at its defeat. For it is only, but only, in defeat that it will be forced to re-examine itself and the thieving, duplicitous, broken creature it has become. When it is able properly to do that it will, I guarantee, find it has sufficient reserves both of internal democracy and moral courage to recognise and rediscover the values that made it a great movement and the hope of a cruelly and interminably subjugated people in the first place. The ANC is not the first "liberation" party to fall into the trap of becoming our beast it was created to destroy. And it wont be the last. The only unique thing about it is that it is our beast. As a people, as South Africans, we must never shrink from confronting it when it strays. It is a duty.

1 October 2012 Business Day Page 10 Editorial Rating cut is a wake-up call THE decision by Moodys to cut SAs sovereign debt rating may have surprised Finance Minister Pravin Gordhan and the markets, but it was not completely unexpected. The move puts Moodys Baa1 rating in line with those of its two main rivals, Standard & Poors and Fitch. What took markets by surprise was the timing of the decision, which preceded the Treasurys medium-term budget policy statement later this month and the electoral conference of the African National Congress (ANC) in Mangaung in December. These two events should provide clarity by January on a range of debt and fiscal policy issues, as well as any changes to broad economic policy the big issues ratings agencies concentrate on when making decisions.

Ominously, Moodys kept a negative outlook on its new rating, which is also on par with the outlooks set by the other two global rating agencies. Moodys made it clear it would not hesitate to downgrade SA again if the ANC conference responds to calls for "more radical policies" and "decisive" government action to speed up transformation of the economy. The agency warned this would inevitably lead to more state intervention, which would deter private investment and incoming capital. These comments highlight the fact that all three rating agencies will keep a close watch on the conference and will move swiftly to downgrade SA if those concerns materialise. Standard & Poors struck another sombre note soon after the Moodys announcement last week, saying that since it assigned a negative outlook to its BBB+ rating for SA in March, "the news flow has not been good". The agency also said it was very difficult to see the kind of "positive gamechanger" needed to improve economic growth and investment prospects as well as foster the faster fiscal consolidation that would offset rising public sector debt. The other shock of the downgrade was that Moodys dwelled on what it sees as the governments "reduced capacity" to handle the prevailing political and economic situation. The "fractious domestic environment" was not conducive to the reforms outlined in the National Development Plan, it said. This lack of confidence stems from the heated debate on contentious issues such as nationalisation, and the dysfunctional relationship between workers, unions and business in the wake of violent protests at Lonmins Marikana platinum mine. The unrest has been spreading to other mines and industries and will hamper the economys growth and competitiveness if it continues, especially if it results in the kind of double-digit wage hikes Lonmin had to concede to end its strike. Even as Moodys was preparing its announcement, Impala Platinum, which was forced to shut its operations for six weeks in January and February due to an unprotected strike that led to a 10% wage increase, revealed that it had granted a further increase averaging about 5% to avert another strike. Moodys pointed out that the mining turmoil has finally made foreign investors sit up and take notice of SAs entrenched social problems, which have been shoved into the background for years, largely because of the extent of the ANCs political support and SAs prudent financial policies. If anything can be criticised in the thinking behind the Moodys downgrade, it is the reference it makes to SAs "reduced room for manoeuvre" in its fiscal policies. So far, the Treasury has managed to balance the need for spending on infrastructure and social welfare with the kind of budget discipline favoured by investors.

As far as the Treasury is concerned, this is not going to change. The trouble is that divisions in the ANC mean there is no guarantee the Treasury will have the influence to contest any new, economically questionable decisions that may be taken by the ANC in December. The issues spooking investors ahead of the ANC conference stem from the heated policy debates taking place both within the party and with its alliance partners. The foundations of the economic policies that have won SA credibility since the end of apartheid, and the role of the Reserve Bank, are up for discussion at Mangaung. In addition, some form of nationalisation in the mining sector not a wholesale asset grab is almost certainly on the cards, while a new tax on mining profits looks increasingly likely. ANC secretary-general Gwede Mantashe claimed after the Moodys downgrade that the private sector was "on strike" and not creating jobs, necessitating increased state intervention in the economy. This is simply not true, although it is the case that private companies are wary of investing in the existing political environment with good reason. The Moodys decision should be a wake-up call for the party. Unfortunately, with all the political jockeying, it is not apparent that introspection is high on the agenda. It is, therefore, unlikely there will be any decisive policy rethink on the part of government soon that could reassure investors and persuade rating agencies to protect SAs current credit ratings. As things stand, the opposite is, unfortunately, more likely.

1 October 2012 Business Day Page 3 Monde Maoto Chamber of Mines willing to engage with Cosatu to end strikes THE Chamber of Mines is willing to engage with the Congress of South African Trade Unions (Cosatu) to work towards finding a solution that will bring an end to wildcat strikes in the mining sector, the chambers senior executive for employment relations, Elize Strydom, said yesterday. The violent wildcat strike at Lonmins Marikana mine last month, which resulted in high salary hikes, has spread to other companies and raised questions about the competitiveness of SAs mining sector. A clash between miners and police at Marikana in August left 46 people dead and dozens injured. "We are especially interested to hear if they (Cosatu) are able to convince workers to return to work... and what their proposals are for entering wage negotiations in light of the unprotected strike action," Ms Strydom said.

Mining is SAs biggest industry. President Jacob Zuma said a week ago the strikes in the gold and platinum sector had cost the country R4.5bn in lost output. No formal meeting between the chamber and the federation has been scheduled, and Ms Strydoms remarks come as the labour unrest in SAs platinum mining sector spreads to other mining sectors. On Saturday, Cosatu general secretary Zwelinzima Vavi told striking mineworkers at Gold Fields KDC West mine, in Carletonville on the West Rand, that the trade union federation would "take up the fight" for wage increases for all workers employed in the mining sector. Mr Vavi added that although the federation was not calling for illegal strike action, it was, however, willing to pursue demands for the R12,500 monthly salary. This is the amount most miners have been calling for as a base salary. Strikes in the mining sector spread further on Friday, with workers at the Samancor Chrome mine in Mooinooi, outside Rustenburg, staging an underground sit-in to demand a R12,500 monthly salary, while the chairman of the National Union of Mineworkers (NUMs) branch at Anglo American Platinums (Amplats) Khomanani mine, also near Rustenburg, was critically injured after an attack at his home in the town. "He escaped with serious injuries and has been admitted in the intensive care unit of a local hospital," said NUM spokesman Lesiba Seshoka. According to the NUM, this comes after a string of threats and intimidation meted out against its members around the platinum mine. Close to 75,000 workers are on strike or are being prevented from going to work in South African mines, including at operations run by the worlds thirdand fourth-biggest bullion producers, AngloGold Ashanti and Gold Fields. Village Main Reef, the latest to report wildcat strikes, said 1,700 workers at its Blyvoor operation in North West downed tools in an illegal strike. Amplats is going ahead with planned disciplinary action against those taking part in the illegal strike, and this could result in dismissals. The strike is entering its third week. Production at four of Amplats five mines has halted. The record 22% Lonmin pay rise, after the worst single violent incident in SA since apartheid, has fuelled concern that more miners would use violence or unauthorised stoppages to press wage demands. Last week, SBG gold analyst David Davis said workers demands were according to the "Lonmin settlement" and strike action could continue to spread, even to other industries.

"The combination of declining production and unrelenting inflationary pressures suggests that almost all mature South African operations are likely to face downsizing within the next 12 to 36 months at best, as an imperative and not as an option," Mr Davis said. Already the transport industry has struggled under strikes that have seen more than 20,000 truck and freight drivers stop work. The strike enters its second week today. Impala Platinum (Implats) last week offered its workers a second wage increase, which the company said would add another 5% to its wage bill. In February, Implats suffered a six-week strike, in which it lost R2.8bn in revenue. 1 October 2012 Business Day Page 2 Bekezela Phakathi ANC nominations to vie with Farlam inquiry AS THE African National Congresss (ANCs) leadership nomination process officially opens, it will undoubtedly dominate political discussion this week. Also set to take centre stage this week will be the Farlam commission of inquiry into the Marikana massacre, which starts today. The opening of the ANC leadership nomination process for the partys elective conference in Mangaung in December means that members, branches and provinces can now openly talk about who they want to lead the party. Despite a ban on discussions about ANC succession until nominations were officially opened, the ANC Youth League has already come out in support of, among others, Deputy President Kgalema Motlanthe and ANC national executive committee member Fikile Mbalula. ANC secretary-general Gwede Mantashe at the weekend confirmed the partys membership had increased to about 1.2-million. KwaZulu-Natal had seen a spectacular increase of about 90,000 members between January and September, while the Eastern Cape membership had dropped noticeably. President Jacob Zuma enjoys a lot of support in his home province of KwaZulu-Natal, while his support in the Eastern Cape is uncertain. These figures could, therefore, indicate a boost for Mr Zumas bid for a second term as president of SA.

The nomination process is to conclude at the end of next month and about 4,500 delegates of the 1.2-million ANC members are expected to attend the elective congress in December. All 3,687 branches are to be represented. Retired appeal court judge Ian Farlam s inquiry into the violent, wildcat strike that ultimately claimed 45 lives starts at the Rustenburg Civic Centre today. Dozens were injured during the strike. The commission will seek to establish what happened in Marikana when miners clashed with police and will look at whether mining company Lonmin did enough to resolve the labour dispute. It will also explore whether Lonmin responded fittingly to the violence and whether it, "by act or omission", created an environment conducive to the creation of tension or labour unrest. The South African Police Service is expected to present photographs and notes detailing what exactly happened, in their view. The commission of inquiry is expected to complete its work in four months. The truck drivers strike as well as the strike at Gold Fields will also be worth watching this week. Workers in the freight transport sector are on strike over wages. The truck drivers are demanding an increase of 12%, against the employers revised offer of 8.5% effective from March, and a further 0.5% from September next year. Wage negotiations between the Road Freight Employers Association, workers unions and cash-in-transit sector companies are expected to continue today. At Gold Fields, workers have been on strike for more than three weeks demanding a monthly wage of R12,500 after deductions. Congress of South African Trade Unions (Cosatu) secretary-general Zwelinzima Vavi said at the weekend that Cosatu and the National Union of Mine Workers would lead the way in fighting for better wages for mineworkers in all sectors. The wave of strikes has already had a negative impact on the economy as evidenced by last weeks move by credit rating agency Moodys to downgrade SAs credit rating by one notch. Moodys cited concerns about the government's ability to tackle economic problems as well as political risks. On Friday, Democratic Alliance leader Helen Zille will form part of a panel discussion on job creation at the South African Chamber of Commerce and Industrys annual convention. The panel will include Cosatu president Sdumo Dlamini and economist Dennis Dykes.

1 October 2012 Business Report

Page 1 Ann Crotty State mum on bailout for SAA Malusi Gigaba, the Public Enterprises Minister, would not comment on reports that in the past few days the National Treasury had provided the crucial multibillion-rand guarantee that was needed to finalise SAAs 2012 financial accounts, a spokesman for the minister said yesterday. Mayihlome Tshwete told Business Report that the minister would only make an announcement on the matter at the airlines annual general meeting on October 15. Yesterday the Treasury would neither confirm nor deny the speculation about the guarantee being provided. The departments failure to secure the guarantee in time for the SAA board to meet a number of regulatory deadlines was the reason for the final collapse in relations between Gigaba and the board. In a dramatic move last week the chairwoman, Cheryl Carolus, and seven of her co-directors announced their resignation with immediate effect citing lack of support from the department. Most of the directors were appointed by the former minister, Barbara Hogan. Without the guarantee PwC and Nkonki, SAAs joint auditors, were unable to finalise the accounts without qualifying them, which meant that SAAs financial statements could not be tabled in Parliament. This placed the directors in an extremely vulnerable situation as they are deemed to be responsible for the statements. In terms of the Public Finance Management Act (PFMA), the Companies Act and the King Code on corporate governance, the directors of SAA are responsible for ensuring that the parastatals financial accounts are submitted timeously. The PFMA requires that the accounting authority, which is the board, must submit within five months of the end of a financial year the annual financial statements for that year. The Companies Act requires that a company, which includes a state-owned entity, must prepare annual financial statements within six months after the end of its financial year. The King Codes principles require that directors meet their reporting responsibilities and adhere to non-binding rules, codes and standards.

The strained relationship between the board and the minister, who represents the government, SAAs sole shareholder, became unworkable after the minister blamed the board for the delay in finalising the financial statements. Reflecting the crucial importance of the timing involved in the controversy, Carolus told journalists last week: I have a stamped receipt from the Department of Public Enterprises showing that the statements were received by them on August 31. All that was outstanding was a letter from Treasury indicating that it would support SAA if the oil price continued along its forecasted path. As part of their auditing function PwC and Nkonki are required to interrogate SAAs cash flow projections for the upcoming financial year and would have to do projections under different scenarios. Critical factors in such an exercise would include possible further increases in the fuel price as well as the companys ability to pay for planes that were ordered years earlier. The auditors would have to do stress tests on the balance sheet to determine whether or not SAA would be able to meet its payment obligations under various scenarios and to the extent that the companys own balance sheet could not meet these obligations, a guarantee from the government would be required, an independent auditor told Business Report. Such guarantees are commonly used by state-owned enterprises. SAAs annual report for 2012 reveals that it had a R1.6 billion going concern guarantee from the government in that year. The need to make payment for the delivery of aircraft ordered several years ago and the sharp hike in the price of fuel have combined to significantly increase the size of the guarantee needed to a reported R4bn to R6bn. The responsibility for getting the guarantee from the Treasury lies entirely with the department and involves, as one source described, a formal process with adherence to strict protocols. The process involves an interrogation by the Guarantee Certification Committee, which would attach conditions to the guarantee. An audit of the paper generated by such a process would quickly clarify where responsibility lies for a damaging public spat, which has resulted in the loss of a board that was rated by the Institute of Directors as among the top 25 percent in the country.

30 September 2012 Sunday Times Page 4 Sapa

Malema's not my boy: Mbalula Sports Minister Fikile Mbalula has denied that expelled ANC Youth League leader Julius Malema was his political ally, according to a report. "Our detractors want people to believe that we are made by Malema and without Malema we are politically doomed," he said, according to the Sunday Times newspaper. He was aware that under Malema's leadership, the league had called for Mbalula to become secretary-general. Mbalula said that while he supported President Jacob Zuma at the last African National Congress conference in Polokwane, he did not become "a Zuma boy". "I have led the youth league that said Zuma must become president, but I have never become a Zuma boy. Why should today it be that Julius is my boy? I think it is just scrap-yard mentality." He would not say whether he was planning to stand for the position of secretary-general. He condemned ANC leaders who attacked those who wanted Zuma removed, but did not take action against the president's supporters. "Whenever people do the sign of change, they say those are people who must be butchered," he said.

3 October 2012 Business Report Page 1 Roy Cokayne, Dineo Faku, Wiseman Khuzwayo and Nompumelelo Magwaza Violence flares up as wildcat strikes spread to other industries Murderous violence in the mining sector strikes re-emerged yesterday as the winds of wildcat boycotts carried flares of labour dissent to the motoring industry, halting production at Toyota South Africa Motors Prospecton plant in Durban. Reports of five more deaths in Rustenburg earlier this week, unconfirmed so far, have been underplayed, but National Union of Mineworkers (NUM) general secretary Frans Baleni was quick in attributing the violence to employer obstinacy.

Police confirmed that one man was hacked to death near Rustenburg on Sunday night. Our fear is that the more dismissals happen, well see the violence escalating. We are saying that a solution should be found because dismissals are not an option. People are attacked because they want to go to work, Baleni said. The reasons for the Toyota SA strike are not clear, coming as it did when some motor manufacturers are starting to feel the impact of the transport sector strike. Leo Kok, a spokesman for Toyota SA, said yesterday that production at the plant was halted from the second shift on Monday because of a high level of absenteeism by workers. Kok said no production took place yesterday and none was planned for today. Discussions between Toyota SAs senior management and National Union of Metalworkers of SA (Numsa) representatives were ongoing in an attempt to resolve the dispute. He was unable to specify the reasons for the stayaway, adding that Toyota SA was treating it as an internal matter. Kok added that a meeting between plant workers and Numsa representatives was planned for today. Castro Ngobese, a national spokesperson for Numsa, said the unions national and KwaZulu-Natal leadership would be at Toyotas plant today to listen to the grievances of the workers and try and find an amicable solution. However, Ngobese was unable to provide clarity about the workers grievances. The more than week-long transport sector strike is now causing disruptions in the motor industry. Stewart Jennings, the president of the National Association of Automotive Component and Allied Manufacturers, said yesterday that the impact of the strike on component manufacturers was patchy, with a lot of problems around Gauteng, but little disruption in the Eastern Cape and KwaZulu-Natal. A disruption to automotive component supplies to the various manufacturing plants around the country could bring production to a standstill. Alisea Chetty, a Ford Motor Company of Southern Africa spokeswoman, said the flow of production at its Silverton vehicle plant and Struandale engine plant in Port Elizabeth had been disrupted because of the impact on supplies of the transport sector strike.

Ford SA was working with its suppliers to prioritise the shipment of parts. Guy Kilfoil, a BMW South Africa spokesman, said it had lost the production of 30 cars last week because axles had not be delivered on time, but had managed to catch up this lost production before the end of last week. Denise van Huyssteen, a General Motors South Africa spokeswoman, said its material handling was outsourced and these workers were on strike, but contingency plans it had in place had enabled the company to maintain production. Matt Gennrich, a Volkswagen South Africa spokesman, said contingency plans it made before the strike commenced had enable it to keep production running with difficulty. Veralda Schmidt, a Nissan South Africa spokeswoman, said it had not had any disruptions to its operations because it had sufficient counter measures in place to ensure its operations were not interrupted. Attempts to obtain comment from Mercedes-Benz South Africa were unsuccessful. Agreements Yesterday, Gold Fields said it had reached a formal agreement with NUM to implement a new operating model at its developing South Deep gold mine near Johannesburg. The mining company said that now that the parties had agreed on the key aspects of the new operating model, South Deep had withdrawn the section 189 notice issued to the NUM on August 2. Nick Holland, the chief executive of Gold Fields, said: This agreement will define the future of South Deep and position it to become one of the most modern underground mechanised mines both locally and internationally. Baleni said the NUM and Petra Diamonds were in talks over a R21 500 salary demand by employees. A Petra Diamonds spokeswoman confirmed yesterday that the company was in discussions, without giving details. She said that a limited number of employees went on a work stoppage at its mine. Chamber This week, wildcat strikes spread to junior gold producers Gold One International and Village Main Reef on Monday.

At Gold One an illegal strike was reported at its Cooke 4 shaft at the recently acquired Ezulwini mine, while Village reported an illegal strike at its Blyvooruitzicht mine. Gold One said it had implemented a no work, no pay policy and had issued an ultimatum for employees to return to work. Should employees not cease illegal industrial action, Gold One will approach the Labour Court on an urgent basis to interdict the illegal action, it said yesterday. Village said yesterday that it might issue an ultimatum to striking employees depending on the outcome of a mass meeting scheduled to be held at the operation today. Minerals Minister Susan Shabangu said yesterday: Job losses are a cause of concern, we are a country which has a major challenge of unemployment and we cannot afford contribution to unemployment. From our side [as a department] we are asking how best to reposition the platinum sector to minimise job losses. However, despite intervention by management and the NUM, operations remained halted at Gold Fields Kloof-Driefontein Complex (KDC) West operation in Carletonville, where 15 000 employees were on illegal strike, and at the companys Beatrix mine in the Free State, where 9 000 workers were on a wildcat strike. Gold Fields shares fell 1.25 percent on the JSE to R1.06. Blame For its part, Cosatu and NUM have enlisted the SACP in laying blame for the Anglo American Platinum strike at the foot of mine bosses. Impala [Platinum] committed a grave error in offering an 18 percent increase to one category [miners] to the exclusion of the rest of the workers of Impala and, more seriously, outside the collective bargaining process. The two unions said expectations had been raised not by the NUM but by the employers, adding that the recent mineworkers strikes were a response to the employers miscalculations. Meanwhile, fresh prospects for confrontation are brewing at Gold Fields KDC West and Beatrix mines after workers refused to leave their hostels by 11am yesterday as ordered by the firm. Clothing and textiles Yesterday did see the end of a months-long dispute in the clothing industry, with awards of 6.5 percent increases for metro-based workers and between

7.2 percent and 8.5 percent for non-metro workers, the Southern African Clothing and Textile Workers Union general secretary, Andre Kriel, confirmed. The agreement, which was signed on Monday, would be backdated to September 1, which was the effective date from which increases were due. In the latest agreement, which was signed by seven clothing manufacturing companies, wages for non-metro workers would be increased by about R45 a week. The agreement is cold comfort though for workers in the home textile sector who have entered a third week on strike after rejecting a R35 a week wage increase offer. Workers in this sector are demanding a R45 a week increase. 3 October 2012 Business Report Page 1 Ann Crotty R5bn state guarantee keeps SAA in the air Johannesburg - The Department of Public Enterprises has confirmed that the government had granted SAA a R5 billion guarantee for a period of two years starting September 1, 2012. The guarantee, which was at the centre of last weeks controversial retirement of eight board members including chairwoman Cheryl Carolus, will enable SAA to borrow from the financial markets and ensure that it continues to operate as a going concern. The provision of the guarantee means that SAAs external auditors can now finalise the annual financial statements for the year to March 2012. A condition of the guarantee is that the SAA board develops a turnaround strategy by January and that it is approved by Public Enterprises Minister Malusi Gigaba and Finance Minister Pravin Gordhan. The turnaround strategy will have to include SAAs financing strategy for its planned short- and longhaul fleet. On Tuesday Vuyisile Kona, SAAs new chairman, told Business Report that the strategy formulated by the previous board under Carolus would be scrutinised by the new directors once they had familiarised themselves with the issues. We wont scrap it; we will make changes to it if necessary. Kona said that he had met with Carolus earlier in the week to discuss the issues facing SAA. I called Cheryl and said I needed her help and she made herself available.

In what appears to be a bid to ensure there is no repetition of the circumstances that led to last weeks dramatic events and to ensure that the Treasury plays a more active role, the government has set up a technical committee comprising representatives of the Treasury and the Department of Public Enterprises. The committee will monitor SAAs financial position and progress with developing and implementing the turnaround strategy. The departments delay in formally applying to the Treasury for the guarantee needed by SAA auditors precipitated last weeks dramatic moves as it meant the board was in contravention of the Companies Act and the Public Finance Management Act. A joint committee, which is expected to get ongoing input from SAA, will ensure faster response times for any future financing issues. In interviews with the media yesterday, Kona stressed that the national airline was extremely resilient and was not vulnerable to movements in personnel. I want people to understand that people may come and go but SAA continues to operate; it is resilient. And as the board, our job is to ensure that it remains resilient. While the final decision to retire appeared dramatic and was made acrimonious by Gigaba blaming the board for the delay in finalising the financial statements, it is likely that most of the eight directors would have retired at the next annual general meeting. It appears that because of the expected significant changes to the board, Carolus drew up a detailed transition plan outlining the challenges facing SAA. Kona is studying the transition plan, which he said was designed to ensure some continuity at board level.

3 October 2012 Business Day Page 3 Sam Mkokeli Ballooning ANC membership figures raise eyebrows EXACTLY when did African National Congress (ANC) KwaZulu-Natal membership figures balloon? It came as a shock at the weekend when it was revealed that it had signed up almost 87,000 new members since the beginning of the year. Such a huge jump fanned speculation that there has been gerrymandering, meant to boost President Jacob Zumas re-election bid. KwaZulu-Natal, Mr Zumas home province, is at the forefront of the campaign. In January, the province had 244,900 members, and the figures released by the ANC at the weekend saw its biggest province leaping to 331,820, out of the ANCs total membership of 1.2-million members.

That the Eastern Cape has been going the other direction has been perplexing to people in and outside the ANC. In January, the Eastern Cape was hot on KwaZulu-Natals heels with 225,597 members. According to the latest figures, the home of the ANC now has slid to 187,585. That means about 38,000 members have left the party in that province, or have not paid the R12 required to renew the annual membership. ANC secretary-general Gwede Mantashe has attributed the Eastern Capes decline to serious organisational problems. That is plausible. However, the decline of a province that is hostile to Mr Zumas re-election raises eyebrows. It was Mr Mantashe who said two years ago that a lot of the ANCs branches were dysfunctional, and were only revived for conferences. It then becomes strange for the Eastern Cape to be losing members in a conference year. Also, elections have been due in the Eastern Cape since the beginning of the year, with five regional elections held so far. KwaZulu-Natals growth surpassed the provincial leaders own targets. At the provincial conference in May, KwaZulu-Natals official records showed that the province had 252,637 members. The figures released last week came as a surprise to many. A senior member of the ANC says the audit cutoff was June 15, meaning any members gained after that would not be counted. That suggests that KwaZulu-Natal managed to increase its membership figures by 79,183 in just a month. Limpopo also grew, from 114,385 to 161,868. North West grew from 60,319 to 75,145. Its also strange that these dysfunctional provinces membership figures are on the rise, and the Eastern Capes are on the decline. North West is probably the ANCs most dysfunctional province. It has two distinct camps that are at war. The provincial executive was elected early last year. Before that, the province was run by a task team led by people who are from other provinces, deployed by the ANCs national executive council (NEC). With all that confusion, they still managed to attract 15,000 new members? The membership trends would have been a big deal if the NEC had accepted the suggestion that branches be allocated voting seats at Mangaung as a proportion of their membership size. That would have seen KwaZulu-Natal being allowed to send more than 1,000 delegates. But that format was rejected at an NEC meeting, where it was decided that each branch must have at least one delegate, as per the ANCs constitution. ANC conferences are easily won at the membership and delegate breakdown stage. You only need to look at the breakdown of delegates to tell which way it will go. KwaZulu-Natals numerical strength gives it more comfort now, 11 weeks before the Mangaung conference, while opposing provinces look demoralised by the breakdown of delegates.

The membership audit system is overseen by Mr Mantashes office. And it is an open secret in the ANC that the secretaries have the power to frustrate hostile branches. Mr Mantashe and Mr Zuma are enjoying the wave of incumbency. It has become difficult to remove those in positions, primarily because of the power of their offices. The squeals that Mr Mantashe and Mr Zuma are extracting from their incumbency, as they squeeze the lifeblood out of their opposition, are heard. But there is always the risk that the perception of gerrymandering will be there long after the Mangaung conference to discredit those who will be elected.

3 October 2012 Business Day Page 2 Carol Paton Analysts wait for signs of SAs direction WHILE Moodys downgrade of government entities and municipalities yesterday was expected, analysts are now anxiously awaiting Finance Minister Pravin Gordhans medium-term budget policy statement on October 24 and the resolution of economic policy at the African National Congresss (ANCs) national conference in December for indications of SAs future direction. The two are the most keenly anticipated political events since the uncertainty of the first years of democracy, as doubts grow over the governments ability to solve intractable social problems. Yesterdays action by Moodys had no effect on the market. It followed the ratings agencys decision last week to downgrade SAs sovereign rating by one notch. It also included a one-notch downgrade for Eskoms senior unsecured bond rating to Baa3 from Baa2; for Telkoms global scale issuer rating to Baa3 from Baa2 and single-notch downgrades for a range of municipalities. These include the metros Johannesburg, Cape Town, Ekhuruleni, Tshwane and Nelson Mandela Bay. Moodys said the weakening of the governments credit profile was the reason behind the downgrades. It brought Moodys ratings in line with those of Fitch and Standard & Poors, another reason for the lack of response in the market yesterday.

All eyes will now be on the budget policy statement and the outcome of economic policy debates at the ANCs Mangaung conference, Investecs fixed-income portfolio manager Malcolm Charles said. "We think the ratings agencies have done their reviews for now and wont move again before the medium term budget statement and Mangaung. Economic policy has been up in the air and there has been so much uncertainty. These will be two big events," Mr Charles said. "If one looks at the concerns that Moodys highlights the unfriendliness of the investment environment, the social issues, and the general direction of policy the environment (to attract) investors has not been created ," he said. Wikus Furstenberg, portfolio manager at Futuregrowth Asset Manager, said that while yesterdays downgrades came as no surprise and had not affected the market, the issues raised were serious. "At present there are large flows into the bond market, which is a result of the global search for yields. Relative to other opportunities, SA still looks okay. But the focus is on the issues (being raised): this doesnt look good and is getting worse," Mr Furstenberg said. As the global economy recovers and opportunities arise, the danger will grow that investors will turn away or sell. The governments fiscal policy, which most affects the bond market, would therefore be closely watched. "The budget statement will be crucial. There is some fiscal slippage but spending and revenue for 2012 do look alright. The concern is what may lie beyond, on the horizon," Mr Furstenberg said.

3 October 2012 Business Day Page 3 Setumo Stone ANC allocates 4,500 Mangaung votes NUMBER-crunchers in the African National Congress (ANC) were hard at work last night after the final allocation of voting delegates for the partys crucial elective conference was released yesterday. According to circulated figures, KwaZulu-Natal leads with 974 delegates, followed by the Eastern Cape and Limpopo with 676 and 574 respectively. Those supporting Deputy President Kgalema Motlanthe to replace President Jacob Zuma said that in comparison with initial unofficial figures, KwaZuluNatal lost eight delegates in the final count, while Eastern Cape gained 120.

The initial count was seen to favour Mr Zumas re-election. While KwaZulu-Natal is expected to back Mr Zuma, the biggest region in the Eastern Cape, OR Tambo, supports Mr Motlanthe. However, the Eastern Capes provincial leaders support the president. Mr Zumas other core provinces, Mpumalanga, Free State and Northern Cape, have 467, 324 and 176 delegates, respectively. Mr Motlanthes backers in Gauteng get 500 delegates. The divided provinces, North West and Western Cape which will hold provincial meetings to discuss nominations today get 234 and 178 respectively. The youth league, veterans league and womens league will each send 45 delegates, and there will be 82 national executive committee (NEC) members and 20 provincial executive members per province, bringing the total number of votes to 4,500. Meanwhile, ANC Western Cape provincial chairman Marius Fransman and secretary Songezo Mjongile are poised for a showdown today in discussing leadership nominations. The two officials are widely believed to back different sides in the partys succession race. This comes as the ANC lifted the ban on succession talk at the weekend, opening it up for structures to discuss nominations for Mangaung. Indications are that senior leaders in the Western Cape as well as the North West are divided between Mr Zuma or Mr Motlanthe. Provincial leaders will be seeking to influence branches before they start discussing their preference. However, the last national conference, in Polokwane in 2007, showed that branch delegates did not always follow the wishes of provincial leaders. Mr Mjongile a former leader of the youth league is rumoured to be backing Mr Motlanthe, while Mr Fransman had been associated with Mr Zumas campaign. Mr Fransman, according to reports this week, has declared his support for the president. But Mr Mjongile said no decision had been taken by provincial leaders. Limpopo was the first province to declare its support for Mr Motlanthe, which has created a tense relationship between the province and Mr Zumas supporters in the ANC and in government. Premier Cassel Mathales deputy, Dickson Masemola, is understood to have ditched the anti-Zuma campaign in Limpopo. 3 October 2012 Business Day Page 1 Karl Gernetzky

Schools alliance calls for probe of five education departments THE National Alliance of Independent Schools Associations has asked the public protector to investigate maladministration by five provincial education departments which "deliberately or negligently" reduced subsidies to independent schools. KwaZulu-Natal, Eastern Cape, Limpopo, North West and Mpumalanga are said to be failing to fulfil their obligations by paying incorrect subsidy amounts, arbitrarily reducing the amounts or by paying late. This is threatening the financial sustainability of about 630 schools with 130,000 pupils. Jane Hofmeyr, executive director of the Independent Schools Association of Southern Africa, said yesterday the request to Public Protector Thuli Madonsela for a probe came after years of failure to comply with national norms and standards for subsidies. Nonprofit independent schools are eligible for a state subsidy of 15%-60% of the average cost of a public school pupil to a province, with the subsidy graded against the fees levied on parents. A pupil in a public school costs the state R11,000 -R12,000 a year. Independent schools charging annual fees two-and-a-half times this average do not qualify for subsidies, while low-fee schools could have up to half of their budgets funded by the government. Independent schools educate 504,395 pupils. This intake has doubled since 2000 while public schools are being closed. Ms Hofmeyr told a media briefing that KwaZulu-Natal was the "delinquent province", cutting subsidies since 2008 and deliberately not allocating adequate amounts in its annual budgets. Eastern Cape had "not paid the correct amounts since 2004" and qualifying schools were receiving 30% -35% of the subsidy. Ms Hofmeyr said Mpumalanga had "arbitrarily" reduced subsidies by 50%, and Limpopo would be making a "late" payment of about 60%. North West had not provided schools with estimates of the amount they would receive for four years, she said. Education expert Graeme Bloch said yesterday while independent schools were important "simply because they are part of the school system", the small proportion of pupils they represented and the problems in the far larger public sector spoke of the need for a focus on state schools. But the government should meet its obligations to all elements of the education system, and if it did not want to assist independent schools, it should not have legislation that require s it, he said.

The Independent Schools Association of Southern Africa is the largest member of the National Alliance of Independent Schools Associations. The alliance has filed papers against the KwaZulu-Natal government at the Constitutional Court after the Durban High Court ruled against their bid to get the subsidies paid. The matter will be heard next month. The KwaZulu-Natal education department referred queries to the Department of Basic Education, which had not commented at the time of going to press. 3 October 2012 The Times Page 15 Sipho M Pityana SA is on the precipice We believe that Marikana represents a turning point in South Africa's postapartheid history. The question is: In what direction will we now go? The serious violations of fundamental constitutional rights that the commission of inquiry into the massacre must investigate are all too common a reality for many citizens. The credibility and legitimacy of the police is in tatters. The needless death of Andries Tatane in Ficksburg last year was a grave warning of the danger of militarising the police force. Civil liberties are imperilled by the partisan political use of state security forces. This abuse renders the country vulnerable to destabilisation undermining our future prospects and prosperity. The poorest members of our society are hit the hardest. While an official "state of emergency" has not been declared, the Marikana massacre, and its aftermath, demonstrates the willingness of the government and its security forces to repress the populace and sacrifice the rule of law. The basis on which the police conducted search and seizure operations in Nkaneng, Marikana on September 15 remains unclear. Pauline Masutlho was shot during the raid, and later died from her wounds. In addition, the Women's Forum of Nkaneng has been banned from marching, individuals have been barred from addressing workers for no good legal reason, and there have been numerous arrests of workers in other platinum mines in recent weeks. One might as well be living in the 1980s under the apartheid regime.

Now is the time to draw a line in the sand and to demand a renewed commitment to the constitution, its progressive vision of socioeconomic transformation, and its principled commitment to the rule of law. Marikana cannot be examined in isolation of the socioeconomic and political context in which it occurred. A dangerous culture of intolerance and violence has overwhelmed the democratic determination to resolve matters through peaceful negotiation . The system of collective bargaining established by the 1995 Labour Relations Act has been undermined. Rightly, the commission of inquiry's terms of reference require it to consider corporate responsibility. The imperative of creating decent jobs, with a living wage, has to be a shared social obligation. Thus must we all reflect candidly on the causes of this crisis, recognising its various components, which include: the weakening of institutes that could keep the government in check and prevent abuses of state; an acute failure of leadership in the ANC and the government it leads; deep rifts in and between trade unions; unacceptable wage inequality; and long-term unemployment. While recognising and affirming the right of all workers to embark on industrial action, to associate freely and enjoy the right to freedom of expression, a society established on the basis of constitutional norms cannot countenance the persistent violence and lawlessness that characterises many public gatherings, strikes and protests. We appeal to all people to exercise the right of assembly without bearing arms and weapons of any kind, and to desist from engaging in acts of violence and intimidation. We must also acknowledge the fact that the ANC's looming national elective congress is contributing to the heightened levels of intolerance and conflict as factions within the ANC are jostling for power. The less than democratic ambitions of certain members within the ANC betray the noble objectives of the liberation struggle. The ideal of progressive constitutionalism that was at the heart of the post1994 social compact is under threat. The conference in Mangaung will likely determine whether democratic ideals triumph over dictatorial designs. Progressive organisations and movements must inject new energy and commitment into their efforts to protect our constitutional order. We must commit to working together to pursue rights and secure human dignity.

As the commission of inquiry into the Marikana massacre begins its work in earnest, it must mark the start not only of an open process of an unrelenting, unconditional search for the truth about what happened on August 16, and why, but the start of a renewed collective resolve to build a society that reflects the vision of our constitution. It is an opportunity that must be grasped. The government must do everything possible to ensure that the commission can fulfil its task. The commission is entitled to all relevant information - and must get honest answers from all role-players and decision-makers within both the police and the wider security establishment. Any hint of a cover up will do untold harm not just to the search for accountability and justice, but to the families of the victims of Marikana. Their needs and concerns must be the central concern during this time. The Council for the Advancement of the South African Constitution calls on the commission to put the families at the forefront of the inquiry and to ensure that they have appropriate support, whether in the form of transport and accommodation so that they might attend the hearings, or in the form of ensuring effective legal representation. And they should receive counselling for the tragedy they have endured. The barbarity of the Marikana massacre must be replaced by civility and a newfound respect for human life. 3 October 2012 The Times Page 11 I-Net Bridge Downgrades concern Marcus It was "extremely important" for the government to address the concerns raised by rating agencies and to ensure there are no further downgrades, Reserve Bank governor Gill Marcus said yesterday. Moody's Investors Service downgraded South Africa's sovereign credit rating last week, saying its decision reflected the government's "diminished capacity" to handle its political and economic challenges and a more negative investment climate in the wake of strikes in the mining sector. Yesterday, the rating agency followed up the downgrade with action against three South African entities and sub-sovereign ratings involving 12 local governments and one government-related issuer.

Marcus told a function of the Nordic-South Africa Business Association that it was too early to know what the impact on the cost of borrowing by these institutions would be, given that the rating agency's decision against the entities and local governments was taken only yesterday. She said there was a "huge gap" in the relations between labour and employers and that these were "not healthy" and needed addressing. The wage negotiations and deadly strike at Lonmin's Marikana mine had led to many questions, including why workers were living in shacks and how much employees were involved in decision-making. Responding to questions on the rand, Marcus said the currency was trading in a "reasonable band", and reiterated that the Reserve Bank did not target a level of the exchange rate or reserves as this was a "costly business". Even at current weaker levels, the rand was not meaningfully stimulating the manufacturing sector because "right now there's no market", she said, in reference to a slowdown in demand in key export markets such as China and Europe. Marcus said policy makers should develop policies and regulations that would help South Africa better absorb the shocks of the global economic slowdown. The monetary policy committee's decision to keep interest rates unchanged at current levels last month "was not an easy one", given the deteriorating global economic outlook, said Marcus. She noted that the domestic economic outlook was "beset" by its own challenges, caused by both the global and local slowdown. The bank forecast 2012 growth at 2.6%, rising to 3.4% next year "as the global economy starts to recover", Marcus said. But even these forecasts, which the bank recently revised downwards, were still "optimistic". Household spending continued to be the main driver of domestic growth, she said, adding that private sector gross fixed capital formation remained weak.

3 October 2012 The Times Page 1 TJ Strydom Strike havoc spreads

South Africa's strike season is in full swing as municipal workers in Limpopo walk out today to join thousands of their striking counterparts in mining and transport. The violence, chaos and uncertainty - heightened by the rallying cry for the R12500 magic-number wage - are dragging down ever faster what was already a sinking economy. Though the Treasury has not been able to quantify the financial effect of the strikes, officials are closely watching the unravelling of key sectors of the economy. Signs of falling confidence are evident. Moody's, the agency that downgraded South Africa's sovereign debt rating again last week, yesterday cut the credit ratings of a number of large companies and state-owned entities, making it more expensive for them to borrow. Telkom, Eskom and Gold Fields are among those that will be hard hit by the lower rating on their bonds. Moody's did not explicitly link the downgrading to the Marikana killings six weeks ago, or to the events that followed, but cited "political risk" and policy uncertainty. The Treasury has been struggling to keep a tight hold on the nation's purse strings. This was evidenced yesterday when it announced that, instead of giving South African Airways the R6-billion bailout it had requested, it would act only as guarantor for a R5-billion loan secured elsewhere by the airline. Though Finance Minister Pravin Gordhan and Trade and Industry Minister Rob Davies have tried in recent months to reassure investors that South Africa was still a good place in which to do business, an ANC alliance partner, trade union federation Cosatu, is pulling no punches. "Mine bosses have created this problem with their collusion," said Cosatu general secretary Zwelinzima Vavi yesterday. Vavi's fiery rhetoric is part of Cosatu's latest attempt to rally workers behind it. The federation has started showing support for wage demands much higher than those usually sought and has called on the Chamber of Mines to reopen negotiations in the gold and coal mining sectors. Workers in these sectors are tied into a multi-year wage deals and mining companies such as AngloCoal and Gold Fields have stated they are not willing to negotiate until the deals expire.

According to National Union of Mineworkers spokesman Lesiba Seshoka, illegal strikes involving more than 100000 workers were under way at eight companies:

AngloGold Ashanti; Gold Fields - at its KDC East and Beatrix mines; Anglo Platinum; Petra Diamonds, in Northern Cape, where a R21500 wage is being demanded; Petmin, in KwaZulu-Natal; Bokoni platinum mine, Limpopo; Samancor Chrome Western Mine; and

Gold One. Workers at the Sishen mine in Northern Cape might join the illegal strikes today. Another wildcat strike hit Gold One yesterday when workers downed tools at its Ezulwini mine, near Westonaria, on the West Rand. According to mine management, Ezulwini is a marginal operation on very thin margins and will probably have to close if there is a protracted strike. NUM general secretary Frans Baleni said the union took the risk of job losses seriously. "A number of these companies have stopped their development plans," said Baleni. "This means that new jobs will not be created."

North West police spokesman Brigadier Thulani Ngubane said only one death from Sunday could be attributed to the continuing mine violence. "The body of a 22-year-old man was found on Monday morning. He, along with two friends, was driving near Jabula Hostel mine when they were stopped by a group of people.

"The group allegedly accused the three of working while a strike was on and attacked them with pangas and other weapons. Two of the three managed to escape but their friend was killed." He said the other four murders related to a tavern fight, a traditional ceremony and a suspected robbery. - Additional reporting by Graeme Hosken and Amukelani Chauke 3 October 2012 The New Age LuyoloMkentane

Employers at fault Cosatu Cosatu general secretary Zwelinzima Vavi has blasted the Road Freight Employers Association (RFEA) saying it should take responsibility for disruptions caused by the transport strike. The RFEA needed to think carefully about the negative effect of the strike including the fact that people cant get money at banks and many petrol stations are running dry in the country. They must take responsibility for all the disruptions caused by the strike, Vavi said. He was addressing thousands of truck drivers who had marched from Beyers Naude Square to the National Bargaining Council for Road Freight and Logistics Industry offices in Braamfontein, Johannesburg, yesterday. The workers have been on strike since last Monday, demanding a 12% wage increase. They have rejected the RFEAs offer of 9%. They (the bosses) are refusing to be reasonable, Vavi said, adding that today they would give the RFEA a last chance to table an offer the unions, including the SA Transport and Allied Workers Union (Satawu) and the Professional Transport and Allied Workers Union would not reject. He also called on all Cosatu unions to support the strike of truck drivers and to do whatever you can to make sure the employer brings a new offer to the table. Satawu Gauteng secretary Christopher Nkosi, who handed over the memorandum to officials from the bargaining council, said the union wanted wages for Grade 1 workers to be increased to R5000, Grade2 to R6000, Grade3 to R7000 and Grades4 and 5 to R10000. The unions were also demanding danger, cross-border and night-shift allowances. The unions and the RFEA are due to meet today for another round of negotiations. Spokesperson Magretia Brown-Engelbrecht confirmed receipt of the memorandum tomorrows meeting. Cosatu Gauteng secretary Dumisani Dakile said: We must bring this country to a standstill until they agree to our demands. 3 October 2012 The New Age Siyabonga Mkhwanazi Leader of the DA faces no palace rebellion The ANC may be fighting political skirmishes over the leadership of the party, but the DA will have no similar battles among its members with party leader

Helen Zille certain to keep her job. The DA is going into its elective conference in November and Zille has confirmed she is running for the position, with her facing no challenges from her colleagues and certain to cement her grip. She may be kept busy as premier of the Western Cape but Zille has firm control of the DA and she does not need to take a seat in Parliament to represent her party. With no challengers raising their hands to take on Zille, Athol Trollip, who took her on in 2008 but lost, does not have the stamina to go through a third humiliation in four years. Last year Trollip lost his position as DA leader in Parliament after Zille loyalist Lindiwe Mazibuko captured the votes of party members to lead the party in the national legislature. Trollip first lost the bid for power in the 2008 elections after then leader Tony Leon handed over the reins. Although Trollip trounced another Zille loyalist, Ryan Coetzee, in 2009 for the parliamentary position, the Zille group re-strategised and brought in Mazibuko in 2011 to challenge him. With Zille announcing her availability for a second term her detractors have kept mum hoping that she rules the party until the right person emerges from the shadows to succeed her. Even if she goes it looks like she is preparing ID leader, mayor of Cape Town Patricia de Lille, and Mazibuko, to ultimately succeed her. Meanwhile, it is believed De Lille is eyeing the position of premier while Mazibuko will hang on in the National Assembly. But the catch is, what happens when Zille vacates her party leader post? Who will she choose between Mazibuko and De Lille? 3 October 2012 The New Age Warren Mabona Motlanthe, Sexwale silent on Mangaung The office of Deputy President Kgalema Motlanthe yesterday remained mum on whether he would challenge President Jacob Zuma for the ANCs presidential position at the organisations upcoming elective conference. Motlanthes spokesperson Thabo Masebe told The New Age that Motlanthe would only reveal his stance to the ANC. That is a very strange question you are asking, Masebe said when asked if Motlanthe would throw his hat into the ring against Zuma.

Motlanthe wont answer that question to you, but to the ANC. The nominations are the ANCs internal processes and go and ask them (ANC) that question. Masebe could not even comment on the announcement made by the ANC Youth League that the movement adopted a resolution to nominate Motlanthe as their preferred presidential candidate. Motlanthe and Human Settlements Minister Tokyo Sexwale have been touted as possible challengers to the incumbent Zuma. The pair had in the past criticised the ANC-led government calling for a change of ANC leadership, a move that generated a perception that they were eyeing the governing partys top spot. Sexwale is also believed to be commanding huge support from the ANCYL having come out in support of expelled ANCYL leader Julius Malema. Contacted for comment, Sexwale spokesperson Xolani Xundu said: Ill come back to you later. Several other attempts to contact Xundu later were unsuccessful. The nominations processes for the ANCs candidates were opened on Monday for the conference that will be held in Mangaung in the Free State, in December. 4 October 2012 The New Age TNA Reporter Gauteng eyes investments for job creation Gauteng Premier Nomvula Mokonyane addressing delegates at The New Age Business Briefing on Thursday said the provincial government, before the end of the month, will be launching a one-stop investment centre to facilitate foreign and domestic investment to contribute to the countrys economy. Gauteng together with SARS, the department of trade and industry, the department of environmental affairs and our municipalities, will launch the one-stop centre in a quest to promote investment and job opportunities in our province, Mokonyane said. Mokonyane who praised the province for being the cradle of humankind, said the office of the premier also plans to invest in creating an integrated transport system that is safe and reliable transport. There will be an investment of R10.3bn in this regard. We are now working on the second phase of the BRT system with the city of Ekurhuleni and Tshwane coming together from the beginning of the next financial year, she said.

She said the investment towards the integrated transport system will not only go towards buying new buses but to also re-industrialise Ekurhuleni in order to promote manufacturing and to create jobs. Together with metro rail we are rolling out stock, sorting out signaling because our people have had a raw deal when it comes to reliability of public transport, she said. Mokonyane who was appointed Gauteng Premier in 2009 also used the The New Age Business Briefing to acknowledge the work team Gauteng has done since taking over. We managed to turn the fortunes of Gauteng around, despite having started this term of government with the finances on the verge of bankruptcy. We paid about R4bn of outstanding debt during operation Badala for work previously done for government. We have committed to the 30 day payments of claims that do not have any queries. We are the ones who unveiled the functioning of the Gautrain with the last station being park station, opened in this financial year, Mokonyane said

4 October 2012 The New Age Siyabonga Mkhwanazi Analysts: JZ will be winner in Mangaung The battle for the ANC leadership will be decided by a leader who manages to capture the majority of the strong provinces. Analysts predicted President Jacob Zumas victory if he manages to get all the key provinces behind him. This followed ANCs release of the revised list of delegates who will attend the conference. The revised figures came after the national executive committee agreed to have 416 delegates included to complete a full list of 4500 voting delegates at the Mangaung elective conference in December. Adam Habib of the University of Johannesburg said yesterday that Zuma was close to clinching the ANC presidency as the provinces that support him have more numbers. He said that as most provinces supported Zuma, deputy President Kgalema Motlanthe should study the numbers closely.

He said Motlanthe should be careful and not throw his hat in the ring if the odds do not favour him. Motlanthe is in a dilemma. If he throws his hat in the ring, takes on Zuma and loses, he will end up in the political wilderness, said Habib. He warned Motlanthe to look at the 2017 conference for the party presidency as Zuma appeared to be on the ascendancy. Despite losing political ground in the Eastern Cape, which is the second largest province, Zuma has still kept some of his support, he said. Dirk Kotz of Unisas politics department said that the race was 50/50 with both Zuma and Motlanthe standing a chance. Kotz said it was clear that KZN, Mpumalanga and the Free State supported Zuma, while the Eastern Cape, Gauteng and Limpopo backed Motlanthe. The three remaining provinces would be a decisive factor. Both leaders will have to fight hard to get North West, the Western Cape and the Northern Cape to increase their support. However, Habib warned that the slates were destroying the ANC as they split the party in the provinces. In view of the situation, the ANC may consider following the Cosatu option of retaining the top six leaders without a contest. At its national conference three weeks ago, the trade union federation opted to keep its top leadership without going into a single round of voting. Cosatu was applauded by various sectors for settling the leadership battle without entering into a fight. Habib said that this remained a possibility for the ANC if it wants to keep everyone in the tent. 4 October 2012 Cape Times Page 7 Janet Heard Deeply scarred SA crying out in agony Cape Town - International humanitarian Graa Machel has shone a glimmer of hope into the post-Marikana gloom by saying that SA has a host of good leaders who are capable of building democracy in the country. SA leaders had stood out over the decades, she said. This is the only country, for instance, that has four Nobel Peace Prize laureates. This is a

reference to good moral leadership, this country has people who can lead, she said during an interview this week. Machel, who challenged South Africans at all levels to stop the blame game and to enter a form of dialogue to heal the wounds of the past, told the Cape Times: We must choose leaders who can face the challenges of today, who will do their best. This meant leaders who were there to serve the people, who always have the interests of the people whom they are leading at heart. When asked about specific leadership candidates in the build-up to the ANCs elective congress in Mangaung, she smiled and said: All I can say is choose the best. Resolute about not pointing fingers at the current political leadership especially as the wife of the hailed first president of the country, Nelson Mandela - Machel said it was easy to criticise leaders, but not easy to provide solutions. The country was full of contradictions, with so many positives, but so many horrific statistics too, she said, describing the Marikana massacre as a cocktail of problems, a complex intertwined problem which could not be trivialised in a few sentences. A member of the Elders, a former Frelimo fighter and first education and culture minister in a liberated Mozambique, the international peacemaker said that in conflict situations, things only get better through dialogue, when people talk to one another and build bridges. In her talk, delivered at the Desmond Tutu International Peace Lecture, which focused on the lack of rights for women and children 18 years into the new SA, she described the brutalisation of society over three generations. We need a vision of how to build a healthy society, how to heal, to help free ourselves from anger, fear and accumulated frustrations which make us unable to touch others in a loving manner. SA had strategies in place to tackle many of its political and economic challenges, yet when we talk about social issues, particularly relating to women and children, we do so in a casual manner. There is no vision, no strategy. Machel said the country, on the face of it, was doing well when it came to womens empowerment. Women made up 42 percent of parliamentarians, quotas were in place to bring more gender equity in the workplace, and legislation was in place to protect women against violence. Yet the international advocate for womens and childrens rights, felt desperate that at a societal level, there is little happening.

Also, she said womens political organisations are increasingly more partisan, showing particular interests that are not in the interests of women. The voice of women was fragmented, with women in townships not being heard in the national discourse. When you looked at poverty and unemployment, you are looking at women, who are hit the hardest, she said./ Figures showed that 40 percent of African households in SA were headed by women not because the husbands are dead, but because they are alive but somewhere else. The family structure had changed dramatically due to the impact of HIV/Aids, migration to urban areas and the ongoing migrant labour system. This issue of how miners are living was brought to our eyes when Marikana took place, said Machel. South Africa had not even begun to understand the deep social crisis which has been structured, engineered and implemented for decades under the apartheid system. In the 18 years of freedom, I dont think that this nation has taken steps to reverse it. We have huge difficulties in communicating. We show anger and aggressiveness in our communication and interactions. We accuse one another, almost as if somebody else is responsible. We are in pain, we are hurting, we are harming one another because we cant control our pain. These social issues were a growing concern, she told the Cape Times, challenging South Africans to form a social movement along the lines of the TRC, which devised ways of confronting the past and to to face our demons and build a future together. The social movement needs to bring us all together, and it is not just from the top, she said. Machel, who is chancellor of UCT, singled out education as the most important tool towards womens and childrens empowerment. Education enables people to take control of their life, to break the cycle of poverty, and to dream. Concluding her talk at UWC, Machel compared the new SA to a house. We dreamed it, we imagined it. We starting building. It is has brilliant architects. The roof is solid but the walls are cracking, the pillars are disconnected because the social fabric is collapsing. We need to fix the foundations and the walls. Who is going to fix it?

4 October 2012 Business Day

Page 3 Setumo Stone and Natasha Marrian Pandor climbing ladder towards top echelon in ANC NALEDI Pandor may be a woman to watch at the African National Congress (ANC) electoral conference in December, as she steps into the top position of the Department of Home Affairs following her appointment yesterday. Ms Pandor is being punted for a position in the partys top six, as a possible replacement for treasurer-general Mathews Phosa, who has nailed his colours to the mast over the leadership question and appears to be part of the "forces for change". Ms Pandors new appointment could set the stage for her possible promotion to the inner sanctum of the ANCs top brass, as it brings with it a boost to her public profile. Nominations for the ANCs electoral conference have officially opened and both the pro-Zuma faction and the change group would present their leadership wish lists to branches as the gathering nears. She is a smart choice for President Jacob Zuma, bringing intellectual clout, as critics often cite his lack of formal education as a weakness. According to her government profile, she boasts a masters degree in education, from the University of London, and in general linguistics, from the University of Stellenbosch. Ms Pandor has been an MP since 1994 and part of the ANCs national executive committee since 2002. She is the daughter of the late ANC stalwart Joe Mathews and grand daughter to ZK Matthews, a prominent anti-apartheid teacher, who was a member and president of the ANC in the Cape. Ms Pandor would boost gender representation in the top six possibly along with long-standing national executive council member Jessie Duarte, who appears to be in the running for the position of deputy secretary-general on Mr Zumas slate. No scandals have plagued Ms Pandor although she was chided for her "fake accent" by expelled ANC Youth League president Julius Malema during her tenure as education minister. Home affairs was previously headed by Mr Zumas former wife, Nkosazana Dlamini-Zuma, who left the post last month to head up the African Union Commission. Succeeding Ms Dlamini-Zuma may be viewed as a vote of confidence in Ms Pandors abilities with the troubled but critical home affairs portfolio suitable for the most senior and capable ANC leaders. Ms Dlamini-Zuma was seen to

be leading the process to turn the department around, achieving a qualified audit last year, after a disclaimer in the preceding financial year. Ms Pandor proved her mettle in the science and technology ministry, where she will be replaced by her deputy, Derek Hanekom. Also an ANC national executive committee member, Mr Hanekom presided over the disciplining of Mr Malema through his role as the partys disciplinary committee chairman. The partys treasurer-general, Mr Phosa, has fallen out of favour with Mr Zumas supporters. His name features among desirables for the change group to either retain his position or to be promoted to the position of deputy president. Last week Mr Phosa came close to calling Mr Zuma a dictator, saying that ANC members should guard against the dearth of democracy in the party. "The Germans woke up one day and found themselves ruled by Hitler," he said at an ANC fundraising event in Polokwane. While the slate for the pro-Zuma campaign may change, as lobbying and bartering over positions intensify, Ms Pandors name has been linked to the position of treasurer-general. However, this is a full-time post, which would make Ms Pandor stint as home affairs minister short-lived, if the Zuma cabal prevails. Another name linked to the position in the pro-Zuma group is Deputy Correctional Services Minister and former Limpopo premier, Ngoako Ramathlodi.

4 October 2012 Business Day Page 2 Carol Paton New BEE codes will hit equity dodgers COMPANIES that have less than a 10% black shareholding will be punished harshly by the new black economic empowerment (BEE) codes of good practice, owing to strong lobbying by black business formations. Although the governments express purpose in reformulating the codes was to move away from shareholder transactions, which have distorted BEE policies, strong lobbying to make the ownership element compulsory held sway. In terms of the codes, announced this week by Trade and Industry Minister Rob Davies, but not yet published in the Government Gazette, large companies that do not score a minimum of 40% of the points in the ownership category will be penalised by being automatically downgraded by two levels.

Smaller entities, that are not exempt, would drop one level. To score full marks for ownership, a company would need a minimum of 25% black ownership; to score 40% it would therefore need a 10% black shareholding. Department of Trade and Industry director-general Lionel October said while it had been the governments intention to put special emphasis on only two categories on the scorecard the contribution made to the creation of new enterprises and suppliers, and skills development pressure from stakeholders had resulted in a compromise that also made ownership a priority category. Webber Wentzel partner Safiyya Patel said that on the old scorecard, companies were able to achieve relatively high BEE ratings without having done an equity transaction. "A company could get a considerably good rating of between one and four without achieving a minimum level of black ownership. Some companies did transactions but their black ownership level is below 10%. This is where companies are going to be hit," said Ms Patel. Many companies, particularly foreign ones, had opted to make up points by scoring well on the other elements of the card, she said. "This will now refocus everybodys mind," Ms Patel said. Black Business Council CEO Xolani Qubeka said black business had engaged with the department continuously for many months over the codes and other issues. "Our view is that ownership and control are both very important. Ownership is important in order to encourage new entrants. If you dont do that, then you are saying everything must stay the same," he said. Mr Qubeka said black business also strongly supported the other measures introduced in the codes, designed to counterbalance the emphasis previously placed on "passive shareholder transactions". This refers to another new compulsory element the category of enterprise and supplier development, which also carries the most weight in the new scorecard. Companies will also have to be proactively involved and score well in this area or face automatic downgrades of two levels. In the past, a company was able to score points for enterprise development by assisting an external company. Now, points will only be scored for developing and incubating suppliers in the supply chain.

It is this measure that the government hopes will move BEE policies decisively away from the emphasis on shareholding to the creation of genuine black enterprises. 4 October 2012 Business Day Page 1 Trevor Neethling and Sarah Wild It was ability, not Zuma vote, says Pandor NEW Home Affairs Minister Naledi Pandor says she does not believe her appointment has anything to do with the African National Congresss (ANCs) electoral conference later this year. President Jacob Zuma yesterday unexpectedly announced changes to his Cabinet, just a day after he made known that Ms Pandor was acting home affairs minister. Mr Zuma promoted her deputy, Derek Hanekom, to minister of science and technology. The announcement raised speculation that Mr Zuma had made the two appointments to consolidate his power base in his quest for a second term as president of the ANC. But Ms Pandor said she had no idea why people would believe that their appointments had anything to do with the partys elections. "I hope its because the president has faith in our ability," she said in an interview yesterday. Ms Pandor said she is to meet home affairs senior management today to be briefed on the state of the department and its plans. "I feel daunted, challenged and intrigued by the new opportunity," she said. "I think the former minister has really done a marvellous job and I hope to be able to build on that success." Ms Pandor fills a vacancy left by the resignation of Nkosazana Dlamini-Zuma, who is the new chairwoman of the African Union Commission. Mr Hanekom said yesterday he was honoured by his appointment and believed what was required from him was " continuation, and building on the great work that has already been done in the department". He had been deputy science and technology minister since 2004, and therefore was not nervous about the new post, "because Ive been doing it for so long". A spokesman for the Department of Science and Technology, Lunga Ngqengelele, agreed that the transition would not be a problem as Mr

Hanekom had been "working hand in hand with the minister. For him to become minister, its nothing new." Mr Hanekom said he would continue with Ms Pandors work, such as implementing recommendations from the interministerial review of SAs science, technology and innovation landscape.